If you are experiencing economic hardship because of the coronavirus pandemic, and are worried about making your mortgage payments, there is some good news – but also some notes of caution you'll want to heed. Click through for my video with some important information about handling your mortgage payments.
Monday, March 30, 2020
Wednesday, March 18, 2020
Some great advice I've heard includes creating some structure in your new home life experience. Excerise! Take walks (just be sure to stay 6 feet away from other walkers). Try new recipes. Teach your kids to cook, change a tire, do the laundry, balance a checkbook, etc.
I've also pulled together information on excellent resources for games and educational activities for the kids, as well as links to great entertainment and mental stimulation for adults. This just scratches the surfact of what's available, of course, but I hope it's helpful! I'll add more here as I find them.
Best wishes! We'll get through this!
How to Homeschool During the Coronavirus
NASA's Activities for Kids at Home
Mommy Poppins Games and Educational Activities for Kids
.... and for the parents or older kids: Links to great plays and operas you can watch, museum experiences and more:
Yoga on Youtube
15 Broadway Plays and Musicals you can watch
19 Immersive Museum Experiences
Virtual Museum Tours
Ultimate Guide to Virtual Museum Resources
Metropolitan Opera Nightly Encore Presentations
Wednesday, March 4, 2020
When inventory is this tight, it's a struggle for homebuyers -- especially first-time buyers looking for entry-level homes -- to find move-in ready properties. Buyers can expand their options with a renovation mortgage that combines a mortgage with funds for renovation.
Let me know if you'd like more information.
Tuesday, February 4, 2020
Homeownership offers many advantages over renting, including a stable living environment, predictable monthly payments, and the freedom to make modifications. Neighborhoods with high rates of homeownership have less crime and more civic engagement. Additionally, studies show that homeowners are happier and healthier than renters, and their children do better in school.1
But one of the biggest perks of homeownership is the opportunity to build wealth over time. Researchers at the Urban Institute found that homeownership is financially beneficial for most families,2 and a recent study showed that the median net worth of homeowners can be up to 80 times greater than that of renters in some areas.3
So how does purchasing a home help you build wealth? And what steps should you take to maximize the potential of your investment? Find out how to harness the power of home equity for a secure financial future.
WHAT IS HOME EQUITY?
Home equity is the difference between what your home is worth and the amount you owe on your mortgage. So, for example, if your home would currently sell for $250,000, and the remaining balance on your mortgage is $200,000, then you have $50,000 in home equity.
$250,000 (Home’s Market Value)
- $200,000 (Mortgage Balance)
$50,000 (Home Equity)
The equity in your home is considered a non-liquid asset. It’s your money; but rather than sitting in a bank account, it’s providing you with a place to live. And when you factor in the potential of appreciation, an investment in real estate will likely offer a better return than any savings account available today.
DOES HOME EQUITY BUILD WEALTH?
A mortgage payment is a type of “forced savings” for home buyers. When you make a mortgage payment each month, a portion of the money goes towards interest on your loan, and the remaining part goes towards paying off your principal, or loan balance. That means the amount of money you owe the bank is reduced every month. As your loan balance goes down, your home equity goes up.
Additionally, unlike other assets that you borrow money to purchase, the value of your home generally increases, or appreciates, over time. For example, when you pay off your car loan after five or seven years, you will own it outright. But if you try to sell it, the car will be worth much less than when you bought it. However, when you purchase a home, its value typically rises over time. So when you sell it, not only will you have grown your equity through your monthly mortgage payments, but in most cases, your home’s market value will be higher than what you originally paid. And even if you only put down 10% at the time of purchase—or pay off just a small portion of your mortgage—you get to keep 100% of the property’s appreciated value. That’s the wealth-building power of real estate.
WHAT CAN I DO TO GROW MY HOME’S EQUITY FASTER?
Now that you understand the benefits of building equity, you may wonder how you can speed up your rate of growth. There are two basic ways to increase the equity in your home:
1) Pay down your mortgage.
We shared earlier that your home’s equity goes up as your mortgage balance goes down. So paying down your mortgage is one way to increase the equity in your home.
Some homeowners do this by adding a little extra to their payment each month, making one additional mortgage payment per year, or making a lump-sum payment when extra money becomes available—like an annual bonus, gift, or inheritance.
Before making any extra payments, however, be sure to check with your mortgage lender about the specific terms of your loan. Some mortgages have prepayment penalties. And it’s important to ensure that if you do make additional payments, the money will be applied to your loan principal.
Another option to pay off your mortgage faster is to decrease your amortization period. For example, if you can afford the larger monthly payments, you might consider refinancing from a 30-year or 25-year mortgage to a 15-year mortgage. Not only will you grow your home equity faster, but you could also save a bundle in interest over the life of your loan.
2) Raise your home’s market value.
Boosting the market value of your property is another way to grow your home equity. While many factors that contribute to your property’s appreciation are out of your control (e.g. demographic trends or the strength of the economy) there are things you can do to increase what it’s worth.
For example, many homeowners enjoy do-it-yourself projects that can add value at a relatively low cost. Others choose to invest in larger, strategic upgrades. Keep in mind, you won’t necessarily get back every dollar you invest in your home. In fact, according to Remodeling Magazine’s latest Cost vs. Value Report, the remodeling project with the highest return on investment is a garage door replacement, which costs about $3600 and is expected to recoup 97.5% at resale. In contrast, an upscale kitchen remodel—which can cost around $130,000—averages less than a 60% return on investment.4
Of course, keeping up with routine maintenance is the most important thing you can do to protect your property’s value. Neglecting to maintain your home’s structure and systems could have a negative impact on its value—therefore reducing your home equity. So be sure to stay on top of recommended maintenance and repairs.
HOW DO I ACCESS MY HOME EQUITY IF I NEED IT?
When you put your money into a checking or savings account, it’s easy to make a withdrawal when needed. However, tapping into your home equity is a little more complicated.
The primary way homeowners access their equity is by selling their home. Many sellers will use their equity as a downpayment on a new home. Or some homeowners may choose to downsize and use the equity to supplement their income or retirement savings.
But what if you want to access the equity in your home while you’re still living in it? Maybe you want to finance a home renovation, consolidate debt, or pay for college. To do that, you will need to take out a loan using your home equity as collateral.
There are several ways to borrow against your home equity, depending on your needs and qualifications:5
1) Second Mortgage - A second mortgage, also known as a home equity loan, is structured similar to a primary mortgage. You borrow a lump-sum amount, which you are responsible for paying back—with interest—over a set period of time. Most second mortgages have a fixed interest rate and provide the borrower with a predictable monthly payment. Keep in mind, if you take out a home equity loan, you will be making monthly payments on both your primary and secondary mortgages, so budget accordingly.
2) Cash-Out Refinance - With a cash-out refinance, you refinance your primary mortgage for a higher amount than you currently owe. Then you pay off your original mortgage and keep the difference as cash. This option may be preferable to a second mortgage if you have a high interest rate on your current mortgage or prefer to make just one payment per month.
3) Home Equity Line of Credit (HELOC) - A home equity line of credit, or HELOC, is a revolving line of credit, similar to a credit card. It allows you to draw out money as you need it instead of taking out a lump sum all at once. A HELOC may come with a checkbook or debit card to enable easy access to funds. You will only need to make payments on the amount of money that has been drawn. Similar to a credit card, the interest rate on a HELOC is variable, so your payment each month could change depending on how much you borrow and how interest rates fluctuate.
4) Reverse Mortgage - A reverse mortgage enables qualifying seniors to borrow against the equity in their home to supplement their retirement funds. In most cases, the loan (plus interest) doesn’t need to be repaid until the homeowners sell, move, or are deceased.6
Tapping into your home equity may be a good option for some homeowners, but it’s important to do your research first. In some cases, another type of loan or financing method may offer a lower interest rate or better terms to fit your needs. And it’s important to remember that defaulting on a home equity loan could result in foreclosure. Ask us for a referral to a lender or financial adviser to find out if a home equity loan is right for you.
I'M HERE TO HELP YOU
Wherever you are in the equity-growing process, I can help. I work with buyers to find the perfect home to begin their wealth-building journey. I also offer free assistance to existing homeowners who want to know their home’s current market value to refinance or secure a home equity loan. And when you’re ready to sell, I can help you get top dollar to maximize your equity stake. Contact me today to schedule a complimentary consultation!
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
1. National Association of Realtors -
2. Urban Institute -
3. Census Bureau -
4. Remodeling Magazine -
5. Investopedia -
What's Happening in Your Local Market?
Whether you are planning to sell or buy a property, understanding your local real estate market is empowering.
(Combined 3-County Stats)
This month the Federal Reserve voted to leave its key benchmark rate unchanged, which was widely expected. While the rate decisions by the Federal Reserve do not directly affect mortgage rates, Federal Reserve policy does affect the economic markets overall. Mortgage rates ended the year close to three-quarters of a percent lower than in 2018, a welcomed improvement for buyers as well as homeowners who took the opportunity to refinance.
In 2019 home prices were up again in most markets. Buyer demand continues to be strong but with tepid seller activity still in many locations, total sales are lower than they would normally be in a more balanced market. While up from their recent lows a few months ago, mortgage rates end the year close to three-quarters of a percent lower than a year ago, helping to improve affordability and offset rising home prices.
New Listings increased 16.9 percent for Single Family homes and 28.3 percent for Townhouse/Condo homes. Pending Sales increased 50.1 percent for Single Family homes and 68.2 percent for Townhouse/Condo homes. Inventory decreased 3.5 percent for Single Family homes but increased 0.4 percent for Townhouse/Condo homes.
Median Sales Price increased 15.8 percent to $295,249 for Single Family homes and 8.2 percent to $201,600 for Townhouse/Condo homes. Days on Market decreased 6.3 percent for Single Family homes and 30.9 percent for Townhouse/Condo homes. Months Supply of Inventory decreased 15.0 percent for Single Family homes and 6.7 percent for Townhouse/Condo homes.
With low mortgage rates, low unemployment, and continued wage growth, home buyer activity is expected to remain healthy into the new year. New construction has been on the rise in 2019 and is expected to continue into 2020, but many experts note that the country is still not building enough new units to quench demand. It remains to be seen whether existing homeowners will be enticed to sell by higher home prices, which could finally bring the overall housing market into greater balance.
Above info is combined New Hanover, Brunswick and Pender Counties, provided by Cape Fear REALTORS®
Friday, November 15, 2019
This is a great 2bed/2bath condo on Carolina Beach, with a beautiful south-facing view of the Yacht Basin. $300,000. Bring your offers!
Monday, November 11, 2019
What's Happening in Your Real Estate Market?
October 2019 Stats
Whether you are planning to sell or buy a property, understanding your local real estate market is empowering.
In the three-county area, historically low mortgage rates continue to shore up buyer demand as we enter the seasonally slower time of year. Throughout much of the country, the continued low level of housing inventory also continues to constrain sales activity from where it would likely be in a balanced market. In short, current trends are expected to continue.
For the 12-month period spanning November 2018 through October 2019, the price range with the largest gain in sales was the $450,001 or more range, where they increased 24.4 percent.
The overall Median Sales Price was up 2.4 percent to $251,000.
The property type with the largest price gain was the Townhouse/Condo segment, where prices increased 2.9 percent to $195,000.
The price range that tended to sell the quickest was the $150,000 and below range at 51 days; the price range that tended to sell the slowest was the $450,001 or more range at 109 days.
Market-wide, inventory levels were down 1.3 percent. The property type that gained the most inventory was the Condos segment, where it increased 2.5 percent. That amounts to 3.8 months supply for Single Family homes and 3.3 months supply for Townhouse/Condo.
(Information provided by Cape Fear REALTORS®)
With sale prices continuing to rise and inventory to decline, one surprising statistic is that affordability in the three county area has very slightly improved since 2018. Perhaps this is because historically low interest rates have more than off-set the rise in prices, helping many to find buying a home more accessible.